Wednesday, April 14, 2010

While the beginning of a New Year traditionally represents a fresh start, the arrival of 2010 has many continuing to brace themselves for the ongoing effect of The Great Recession. Though we all hope the worst is now behind us, many companies and individuals alike are still tightening their belts and looking for new ways to reduce spending, while essentially continuing to hunker down for the indefinite future.

Employers in particular are facing the New Year amidst a myriad of potentially dramatic changes not only in projected revenue and expenses, but short and long term impact of the government’s proposed healthcare reform as well as new employment legislation. And now more than ever it’s important to make sure your company is in compliance with that legislation: the United States Department of Labor (DOL) received a $35 million increase to their 2010 budget, some of which has been allocated to hiring an additional 670 field investigators. This increase in bandwidth, combined with potentially hefty fines and penalties for non-compliant employers, mean that today’s companies simply cannot afford to ignore the ever changing world of employment law.

Now more than ever, companies face the three fold challenge of adhering to new legislation, ensuring maximum cost effectiveness, and attracting and retaining great talent amidst a shifting job market. Though no one can be certain what 2010 holds for employers and HR professionals, early indicators point to a few emerging issues for the HR industry in the year to come:

Complying with New Labor Measures

2009 was an active year for employment law, a trend that shows no sign of slowing in 2010. The past year saw the enactment of a number of new federal initiatives, including:

• Genetic Information Nondiscrimination Act (GINA): This initiative prohibits employers from discriminating against employees or job applicants on the basis of their genetic information. Employers looking to ensure compliance with the Act are advised to review the legal definition of genetic information and subsequently reevaluate official company policies for keeping employees’ medical information confidential, as well as make sure that any company sponsored health and wellness programs are not in violation of GINA’s restrictions.

• Amendments to the Americans with Disabilities Act: While employees with disabilities have been protected from discrimination since the passing of the original Americans with Disabilities Act 20 years ago, the Amendments Act was introduced to broaden the scope of this protection. According to Monster, a significant point in the Amendment for employers to recognize is that anemployee will be considered disabled even if he or she is able to use a mitigating measure to overcome the effects of his/her impairment. This means that an employee who takes medication to control his epilepsy, for example, is still protected by the law.

• COBRA Subsidy Extension and Expansion: Included in the National Defense Authorization Act of 2010 which was signed into law by President Obama on December 21, 2009, this measure was an extension of the COBRA Premium Assistance Act. The bill extends the COBRA subsidy from December 31, 2009, to February 28, 2010, and will expand the ARRA’s COBRA premium subsidy period to 15 months (from the current nine months).

According to Laborlawyers.com, a number of additional employment initiatives are expected to emerge from Congress in 2010, including mandatory provision of paid sick leave, the Working allow non unionized employees to file grievances against employers), the Employment Non Discrimination Act (expanding Title VII protections based on sexual orientation), and the Patriot Employer Act (offering tax breaks to those companies that agree to union neutrality).

Staying on Top of Healthcare Changes

From living rooms to board rooms, this year’s hot button issue is sparking debate across the nation. For a large number of employers, the ability to offer comprehensive employee benefits,including health insurance, plays significant role in building competitive compensation packages. When it comes to proposed healthcare reform, however, there seems to be a great deal of confusion among employers regarding how it might impact their benefits packages as well astheir bottom lines.

According to recent reports from the Society for Human Resources Management (SHRM) and research by benefits provider MetLife, many employers (41 percent) aren’t sure what they will do regarding medical benefits should legislation pass, and the findings suggest they might not be fully aware that both the House and Senate bills would establish an expansive set of baseline coverage requirements along with broad based rules relating to guaranteed issue, premium rating, and prohibitions on pre-existing condition exclusions. Research results indicate that roughly 1/3 of employers surveyed expect their benefit plans to remain the same, while according to a separate study by HR consultant firm Mercer, nearly 2/3 of companies anticipate cutting health benefits to avoid paying an excise tax included in the Senate’s proposed Patient Protection and Affordable Care Act.

Regardless of your opinion on proposed healthcare reform, one thing is certain: following the new legislation developments closely will be of critical importance among employers and HR professionals of all sizes and across all industries.

I-9 and E-Verify Updates

While the immigration debate seems to have quieted down somewhat over the past year, the US Citizenship and Immigration Services (USCIS) did take measures to improve the security of the employment verification process. Two major updates in employer verification this year were:

• Changes to the I-9 form: The USCIS revised its I-9 form, and as of April 3, 2009, required all employers hiring a new employee to use this updated form in order to verify new hires and re-verify the employment eligibility of any employee whose work authorization has expired.

• New E-Verify requirements: E-Verify, the Department of Homeland Security’s online system for determining an employee’s eligibility to work in the United States, caught the attention of government contracting and subcontracting companies this year when, as of September 8, 2009, the government began mandating E-Verify requirements for contractors and some subcontractors working under certain types of government contracts. And while currently only 3 U.S. States (Arizona, Mississippi, and South Carolina) have immigration laws requiring all employers (both public and private) to use E-Verify, a growing number are considering legislation that would make the system mandatory for certain types of employers and/or new hires.

By staying informed and up-to-date regarding the key issues facing employers and HR departments this year, companies can prepare accordingly, hopefully saving time and money while avoiding risks and potential penalties down the road.